Natural gas to remain as primary energy source for electricity in US: agency

January 23, 2018 427

The US Energy Information Administration (EIA) on Monday forecast that natural gas will remain as the primary source of US electricity generation in at least the next two years.

According to the January 2018 Short-Term Energy Outlook (STEO), released on Monday by the EIA, the share of total electricity supplied by natural gas-fired power plants is expected to average 33 percent in 2018 and 34 percent in 2019, up from 32 percent in 2017.

The EIA expected the share of generation from coal, which had been the predominant electricity generation fuel for decades, to average 30 percent in 2018 and 28 percent in 2019, compared with 30 percent in 2017.

The mix of energy sources used for generating electricity continues to shift in response to changes in fuel costs and the development of renewable energy technologies.

Since 2015, the cost of natural gas delivered to electric generators has generally averaged 3.50 US dollars per million British thermal units (Btu) or less, and is expected to remain near this level through 2019.

The EIA expects the cost of natural gas for electricity generation to remain relatively competitive with coal-fired electricity over the next two years.

The average cost of natural gas delivered to generators in 2018 is forecast to fall 2 percent, while the delivered coal cost is forecast to rise 5 percent. The costs of both natural gas and coal in 2019 are expected to remain relatively unchanged from this year’s forecast prices.

These relative price changes should increase the share of natural gas generation in 2018.

US power plant operators are scheduled to bring 20 gigawatts of new natural gas-fired generating capacity online in 2018, which, if realized, would be the largest increase in natural gas capacity since 2004.

Generation from renewable energy sources other than hydropower has grown rapidly in recent years. The EIA expects the average annual US share of total utility-scale generation from nonhydro renewables to exceed 10 percent for the first time in 2019.